One of the most important things we can understand about our relationship with money is that most of our attitudes, habits, and beliefs around wealth are ingrained in us before we even understand the true concept of money. It is widely accepted that the way we see the world, and our place within it, is largely developed by the age of six or seven. Unless we confront and change these patterns later in life, we will continue to adopt the same behaviors and therefore create a financial reality for ourselves that is based on what we already believe we deserve.
I was born into a billionaire household, the daughter of an incredibly successful Texas oil magnate. Although this early life instilled many unhealthy patterns and behaviors in me — behaviors that would ultimately lead me into multi-million dollar debt — one thing I never experienced was financial lack. I never went without financially as a child; I never saw my father struggle with which bills to pay; I never knew the discomfort of not having enough food, clothing, and shelter.
To be clear, I felt the lack in many other ways; emotion, compassion, understanding, and self-empowerment. But the fact that I never had to go without in terms of basic needs, created an absence of lack in my financial universe. This has been an important factor in my role as a financial coach, as it has allowed me to help others find their way out of lack, with greater ease.
It is likely that your upbringing was different from mine.
Recent statistics show that 31% of Americans struggle to find enough money to pay their bills, and nearly half do not have spare money for unexpected expenses. Lack is a very real mindset for many people and, more than anything else, this point of view can create obstacles — even for those who truly desire to be financially acute. Maybe, this includes you?
I always say that courage is a vital factor in creating greater financial freedom. If you want to make the choices that are truly in your best interests, you must become wiser in the way you spend, invest and recycle your money. In order to do so, you must be brave enough to say “no” to yourself at times. Because of this, it is vital to confront any ‘lack mentality’ you may have (consciously, or unconsciously) adopted.
When you say “no” to yourself with a lack mentality, you might suffer from feelings of FOMO (feelings of missing out, or resentment, or a sense of being cheated). Because of these unpleasant “feelings”, you may avoid denying yourself, even when it’s detrimental to your financial situation. When you say “no” to yourself without a sense of lack, you understand that your decision is in your best interests and that it is allowing you to remain in, or move closer to, the financial freedom you deserve.
When I need to spend wisely, there is a simple process that I go through to ensure that I am taking care of my financial future and am creating a situation that is aligned with what is best for me. I had to use this technique just recently, on a trip to Paris. My schedule had me staying in the city in the midst of Paris Fashion Week, when hotel rooms were booked out and sold at a premium rate.
By following these simple steps, you can learn to spend without a sense of lack.
You can allow yourself to build a healthier, more empowered relationship with the money you have. Interestingly, the most powerful tool in these situations, is often a question:
1. Acknowledge that you have created a ‘lack mentality’. It’s important to recognize if you have adopted a lack mentality and to acknowledge it within yourself, without judgment. Ask yourself, from where have I learned this idea of lack? You can free yourself from the things you have been taught as a young child. By becoming aware of them, you can learn to move beyond these limiting patterns.
2. Place yourself front and center. You live in a money based reality. You have a body that desires and requires food, clothing, and shelter. The important thing to ascertain is how much you can spend whilst still honoring and empowering yourself (and your body) financially. When traveling to Paris recently — as always — the first question I asked myself was what is going to work for me? It comes down to choice. I know that I have a certain amount of income coming in each month (for me, this amount can vary greatly depending on investment returns). With that income, I have choices. I can re-invest, or have a lovely holiday, or buy that lovely sofa. When spending money, make the questions you ask yourself about choice, not need, and always focus on what’s best for you.
3. Review your current financial situation. The next obvious question is what is my current capacity for spending? Be honest with yourself and, vitally, don’t judge the amount you arrive at. One amount is no more right or wrong than another; it is simply the amount that works best for you in that moment. This question is important as your situation may vary month to month, week to week. Don’t answer this question automatically, based on the past; look truthfully at what you can afford in that moment.
4. Know what your non-negotiables are. Now you know how much you want to spend, it’s time to decide what you can buy for that amount. Always start by acknowledging your non-negotiable priorities. What am I unwilling to compromise on? What do I need? For me, when traveling, this is a sense of feeling safe. I have a certain space in Paris where I feel comfortable, familiar and completely at ease, and that is the 1st arrondissement. So, this is where I stay; this where I search for the best deal I know I will enjoy.
5. Review your preferences. If you are going to truly empower yourself over this purchase, you will need to be aware and honest about what you are willing to forgo. Ask yourself what am I willing to compromise? Work through your list of preferences and decide what you what you are willing to give up in order to stay within your price range. For me, in Paris, I was unwilling to stay in a hotel without a spa or pool, but I was willing to stay in a very small room. Importantly, allow these preferences to change; don’t base your current decision on past decisions.
Finally, there is one habit you can develop that will empower you to spend without a sense of lack and that is to pay off your credit cards every month. Learn to avoid debt wherever possible and don’t allow a credit card balance to grow beyond what you can afford to pay off easily. Not only does this allow you to live with a sense of financial empowerment, but you can fall back on credit cards if you want to treat yourself, on occasion.
The key to spending wisely is to be empowered over your money. This means being more conscious in the way you relate with money, rising above unhealthy and unhelpful mindsets and taking steps to choose how, when and why you spend.